GAC Honda to boost capital by $326m, acquires Dongfeng Honda Engine

Guangzhou Automobile Group (GAC) announced a capital increase for GAC Honda, a jointly controlled entity, following a property rights transaction. GAC Honda’s registered capital will expand from $541,000,000 to $867,215,960. GAC, Honda, and Honda China will collectively subscribe to the capital increase totaling $326,215,960, proportionate to their existing stakes. GAC’s contribution will be RMB1,172,485,400 ($163,107,980), representing 50% of the total increase.

This follows an agreement where GAC Honda will acquire 50% of Dongfeng Honda Engine's equity from Dongfeng Motor Group for RMB1,172,485,400 (HK$1,286,847,541). Upon completion of both the equity transfer and capital increase, GAC Honda will hold 100% of Dongfeng Honda Engine, and GAC’s effective interest in Dongfeng Honda Engine will become 50%. The transactions aim to enhance GAC Honda’s integrated operations in the engine sector, improving supply chain stability and efficiency.

The capital increase is considered a connected transaction under Chapter 14A, requiring reporting and announcement. The total value of Dongfeng Honda Engine's shareholder equity was assessed at RMB2,345,193,600 as of December 31, 2024.